Original author: 0xEliven

Decentralized Autonomous Organizations (DAOs) are all the rage. A DAO Aims To Free AssangeAssangeDAORaising more than 17,000 ETH, Ethereum founder Vtalik Buterinparticipated in the donation. Not long ago, an attempt to bid for a copy of the U.S. ConstitutionConstitutionDAO11613 ETH was also raised, which opened the prelude to the DAO craze.

Behind the hustle and bustle, a thought-provoking question:How to manage the huge assets worth tens of millions of dollars?This is perhaps one of the main reasons why DAOs have never prospered despite the high hopes that the crypto community has placed on them over the years. AssangeDAO and ConstitutionDAO both chose the same answer:Juicebox。

What is the magic of Juicebox? How to solve the long-standing problem of DAO treasury management? In addition, what upgrades does it have?By analyzing the operating mechanism of Juicebox and the specific practices of AssangeDAO and ConstitutionDAO, let's answer them one by one.

Juicebox: Crowdfunding Platform and DAO Treasury Management Protocol

Juicebox is a governance-minimized protocol for community funding of individuals and projects, whose foundersJangodocumentdocumentexplained in:

Juicebox is a business model-as-a-service and programmable treasury for community-owned Ethereum projects.

Independent artists, developers, DAOs, and more generally public goods, need a trendy way to capture the value they create, earn a reliable cash flow from it, and then share it back into the world.

Specifically, Juicebox works by allowing itemsCommitments on how to allocate their cash flow are made before donations are received, thereby signaling to users in advance how their money will be used.Users who fund projects on Juicebox by paying ETH will receive the project's tokens in return.

For projects with predictable costs (such as employee payroll, service subscriptions, donations, etc.), and projects that want to automatically give back to the community when they succeed, Juicebox is very simple and effective as a payment terminal and programmable vault.

How to manage DAO treasury with Juicebox?

As a governance minimization protocol, Juicebox provides a set of simple parameters that can be customized by creators or project parties when initiating fundraising, so as to formulate an economic model that suits their own characteristics. These parameters mainly includewait.wait.

• Fundraising target: The target amount of fundraising. Funds that exceed the fundraising target are called overflow. Holders of project tokens can freely destroy tokens to redeem a certain amount of overflow funds.

• Fundraising cycle: the time of fundraising activities, the project can carry out multi-cycle fundraising, and different parameters can be set for different cycles.

• Fund allocation: When the project party withdraws funds from the Juicebox vault contract, it decides to allocate the funds to the designated wallet or other projects on Juicebox. In addition, when withdrawing funds, 5% will be donated to JuiceboxDAO as platform income.

• Retention rate: When new donations generate tokens, a certain percentage (retention rate) of tokens will be allocated to the specified address.

• Discount rate: When creating a project, you can choose to configure a discount rate to incentivize early supporters. Each new fundraising cycle, the number of tokens awarded for the same amount paid to the project will be reduced by the discounted rate.

• Bonding Curve Ratio: Bonding Curve rewards long-term holders of tokens. For example: under a 70% bonding curve configuration, burning 10% of the token supply will be able to claim about 7% of the ETH from the total overflow, leaving the rest for token holders to share.

Different types of projects can customize parameters according to their own characteristics. For example, for a DAO that raises funds for a specific auction event, it may be sufficient to set the fundraising cycle and fundraising goals; for small teams that need to use the project for a long time, it is also necessary to set funds Allocation, discount rate and retention rate etc.

Practitioners: ConstitutionDAO, AssangeDAO, and JuiceboxDAO

Of the hundreds of projects listed on the Juicebox website, ConstitutionDAO, AssangeDAO, and JuiceboxDAO are arguably the three that stand out the most.

First taste of success: ConstitutionDAO

ConstitutionDAO was the first high-profile project on Juicebox, raising $45 million in just a few days from 17,000 donors. Despite the failed bid for the constitution, ConstitutionDAO announced it was shutting down operations and returning funds via Juicebox. It was a blessing in disguise. After the communityization, ConstitutionDAO achieved wider success and became a model of DAO practice and meme movement.

It can be said that Juicebox was discovered by the community under the aura of ConstitutionDAO. ConstitutionDAO’s fundraising has ended, and its fundraising period parameters are set as shown above, with a discount rate of 0% and token retention of 0%, which means that all assets in the treasury are fully owned by the donors.

Rising star: AssangeDAO

AssangeDAO just finished its second fundraising cycle with a total raised of 17,422 ETH, surpassing ConstitutionDAO.

AssangeDAO sets a discount rate of 0% and reserves tokens of 0%. Like ConstitutionDAO, AssangeDAO does not reserve tokens for team members. It should be noted that AssangeDAO does not set a fundraising goal, usersUnable to redeem overflowing ETH。

Advanced gameplay: hands-on JuiceboxDAO

JuiceboxDAO is a DAO organization that supports the operation of the Juicebox protocol. As an early practitioner, JuiceboxDAO initiated crowdfunding on Juicebox. Unlike AssangeDAO and ConstitutionDAO, JuiceboxDAO is to maintain the development of the Juicebox protocol and needs to pay long-term operating costs such as wages and hardware. JuiceboxDAO sets up a more complex and flexible fund allocation scheme.

JuiceboxDAO is currently conducting its 14th round of fundraising, and its parameters are set as follows:

• There is a clear target amount and duration to cover project operating costs for that period;

• 10% discount rate and 70% bonding curve rate to incentivize early donors and long-term project token holders;

• 50% of the tokens are reserved, and 50% of the newly donated tokens are sent to the designated address.

JuiceboxDAO clearly sets and exposes how funds are withdrawn and how tokens are reserved.

About $210,000 is withdrawn from the Juicebox vault contract, which will be distributed to the project's team members and project owner (contract address), etc.

Reserved tokens 49179978 JBX will be distributed to project team members and project owners in the manner shown above.

Token Economics: The Magic of Price Volatility

The fundraising of ConstitutionDAO and AssangeDAO adopts a fixed-ratio issuance model. 1 ETH is exchanged for 1 million project tokens. As long as the fundraising period is not over, anyone can mint new tokens at a fixed cost through donations. At this time, the price is set by the project. The conversion ratio is determined. After the end of crowdfunding, such as ConstitutionDAO, the price is completely determined by the market.

Another more complicated situation, such as JuiceboxDAO, whose crowdfunding has not yet ended, but due to the set discount rate, the price of the token JBX will be jointly affected by the market and the crowdfunding mechanism. At this time, there are two ways to obtain JBX: donation and secondary market purchase; there are also two ways to exit JBX: redemption and secondary market sale. Assumptions:

• Mint JBX by donating ETH and the price is A (buy JBX)

• The secondary market Uniswap buy and sell price is B (buy and sell JBX)

• Destroy JBX to redeem ETH at a price of C (sell JBX)

Then, there must be A>B>C, otherwise there will be arbitrage opportunities in the market. Referring to the current actual situation, A is 1/105440 ETH, B is 1/402747 ETH, and C is 1/590000 ETH. Under normal circumstances, both buyers and sellers will choose to conduct transactions in the secondary market, which is more beneficial.

A Due to the existence of the discount rate, it will continue to increase with the crowdfunding cycle. C rises when the treasury injects funds and falls when the project withdraws funds from the treasury, and C is also affected by the bonding curve. Observing the actual situation of JuiceboxDAO, projects on Juicebox must donate 5% of the funds raised to JuiceboxDAO to mint JBX. JuiceboxDAO currently has a good flow of funds, and the speed of capital injection into the treasury is much faster than the withdrawal speed, so C is growing. Finally, B also rises within the range.

But if the project is not doing well and the assets in the vault keep paying the operating costs, the opposite could happen.

JuiceboxDAO gives a good example of DAO treasury management, which can be used as a reference for various project-based DAOs. At the same time, JuiceboxDAO is also actively playing the role of community governance during its operation, and adjusting and improving parameters in different crowdfunding cycles. The Juicebox protocol to manage the DAO treasury is still a new experiment, and different projects need to continue to explore according to their own conditions.

In the modular era, DAO expands its territory

Juicebox has given a new solution to DAO treasury management. It pre-commits the funds and uses required by the project, and then raises funds from the community. Judging from the current operating situation, it has attracted hundreds of fundraising projects and has received ConstitutionDAO and AssangeDAO, which the entire encryption community is concerned about, and Juicebox's governance experiments are progressing rapidly and have already begun to emerge. However, a well-functioning DAO requires more than Juicebox, and there are many other problems.

How to ensure the safety and correct use of funds after the assets raised by Juicebox are withdrawn to the project wallet? How to carry out community governance? Alternative answers to the previous question areGnosis SafeFor multi-signature wallets, the optional answer to the latter question isSnapshotvoting tool. Of course, there are many solutions.

It is obvious that modular solutions are beginning to prevail in various fields of the crypto world, this is true for DeFi, and so is DAO. Then, it may not be far away to look forward to the prosperity of DAO.